Financial News

Equity Residential Reports Second Quarter 2024 Results

Guidance Updated on Strong Operating Fundamentals

Equity Residential (NYSE: EQR) today reported results for the quarter and six months ended June 30, 2024.

Second Quarter 2024 Results

All per share results are reported as available to common shares/units on a diluted basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended June 30,

 

 

 

2024

 

2023

 

$ Change

 

% Change

Earnings Per Share (EPS)

 

$

0.47

 

 

$

0.37

 

 

$

0.10

 

 

 

27.0

%

Funds from Operations (FFO) per share

 

$

0.94

 

 

$

0.93

 

 

$

0.01

 

 

 

1.1

%

Normalized FFO (NFFO) per share

 

$

0.97

 

 

$

0.94

 

 

$

0.03

 

 

 

3.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

 

2024

 

2023

 

$ Change

 

% Change

Earnings Per Share (EPS)

 

$

1.24

 

 

$

0.92

 

 

$

0.32

 

 

 

34.8

%

Funds from Operations (FFO) per share

 

$

1.80

 

 

$

1.78

 

 

$

0.02

 

 

 

1.1

%

Normalized FFO (NFFO) per share

 

$

1.91

 

 

$

1.82

 

 

$

0.09

 

 

 

4.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Recent Highlights

  • Same store revenue increased 2.9% for the second quarter of 2024 compared to the second quarter of 2023, driven by strong demand and modest supply across most of our markets. Same store expense increased 2.7% with low growth in our primary expense categories. Same store Net Operating Income (NOI) increased 3.0%.
  • The Company raised the guidance midpoint for its same store revenues by 70 basis points to 3.2% driven by better Physical Occupancy and Blended Rate. The Company also lowered the guidance midpoint for its same store expenses by 100 basis points to 3.0% and increased the guidance midpoint for its same store NOI by 145 basis points to 3.25%.
  • Subsequent to the end of the second quarter of 2024, the Company acquired two properties consisting of 644 apartment units, located in Atlanta and Dallas/Ft. Worth, for an aggregate acquisition price of $216.8 million. The Company is also under contract to acquire an additional property consisting of 202 apartment units, located in Denver, for an acquisition price of $77.0 million.

"We are pleased to report results that exceeded our expectations and to be seeing positive forward momentum in our business which led us to significantly improve our guidance," said Mark J. Parrell, Equity Residential's President and CEO. "Our portfolio continues to benefit from steady demand from our well-employed, higher earning renter demographic, elevated single family housing costs and manageable new apartment supply across most of our markets. We also continue to see positive customer satisfaction and employee engagement results. I commend my colleagues across the Company for their work in obtaining these outstanding results."

Full Year 2024 Guidance

The Company has revised its guidance for its full year 2024 same store operating performance, EPS, FFO per share and Normalized FFO per share as listed below:

 

 

Revised

 

Previous

 

Change at Midpoint

Same Store (includes Residential and Non-Residential):

 

 

 

 

Physical Occupancy

 

96.2%

 

95.9%

 

0.3%

Revenue change

 

2.9% to 3.5%

 

2.0% to 3.0%

 

0.7%

Expense change

 

2.5% to 3.5%

 

3.5% to 4.5%

 

(1.0%)

Net Operating Income (NOI) change

 

3.0% to 3.5%

 

1.0% to 2.6%

 

1.45%

 

 

 

 

 

 

 

EPS

 

$3.04 to $3.10

 

$2.91 to $3.01

 

$0.11

Growth at midpoint vs. 2023 actual

 

39.5%

 

34.5%

 

 

FFO per share

 

$3.72 to $3.78

 

$3.74 to $3.84

 

$(0.04)

Growth at midpoint vs. 2023 actual

 

0.0%

 

1.1%

 

 

Normalized FFO per share

 

$3.86 to $3.92

 

$3.80 to $3.90

 

$0.04

Growth at midpoint vs. 2023 actual

 

2.9%

 

1.9%

 

 

The change in the full year 2024 EPS guidance range is due primarily to higher expected property sale gains, partially offset by higher expected depreciation expense, higher expected other expenses and the items described below.

The change in the full year 2024 FFO per share guidance range is due primarily to higher expected other expenses, partially offset by the items described below.

The change in the full year 2024 Normalized FFO per share guidance range is due primarily to:

 

 

Expected

Positive/(Negative)

Impact

 

 

Revised Full Year 2024 vs.

Previous Full Year 2024

Same store NOI

 

$

0.07

 

Corporate overhead (1)

 

 

(0.02

)

Other items

 

 

(0.01

)

Net

 

$

0.04

 

(1)

Corporate overhead includes property management and general and administrative expenses.

The Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 29 through 34 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 7, 31 and 32 of this release.

Results Per Share

The changes in EPS for the quarter and six months ended June 30, 2024 compared to the same periods of 2023 are due primarily to higher property sale gains, the various adjustment items listed on page 27 of this release and the items described below.

The per share changes in FFO for the quarter and six months ended June 30, 2024 compared to the same periods of 2023 are due primarily to the various adjustment items listed on page 27 of this release and the items described below.

The per share changes in Normalized FFO are due primarily to:

 

 

Positive/(Negative) Impact

 

 

 

Second Quarter 2024 vs.

Second Quarter 2023

 

 

June YTD 2024 vs.

June YTD 2023

 

Same store NOI

 

$

0.04

 

 

$

0.10

 

Lease-Up NOI

 

 

 

 

0.01

 

2024 and 2023 transaction activity impact on NOI, net

 

(0.01

)

 

 

(0.02

)

Corporate overhead

 

 

(0.01

)

 

 

(0.02

)

Other items

 

 

0.01

 

 

 

0.02

 

Net

 

$

0.03

 

 

$

0.09

 

Same Store Results

The following table shows the total same store results for the periods presented (includes Residential and Non-Residential).

 

 

Second Quarter 2024 vs.

Second Quarter 2023

 

Second Quarter 2024 vs.

First Quarter 2024

 

June YTD 2024 vs.

June YTD 2023

Apartment Units

 

77,054

 

77,893

 

77,054

Physical Occupancy

 

96.4% vs. 95.9%

 

96.4% vs. 96.3%

 

96.3% vs. 95.9%

 

 

 

 

 

 

 

Revenues

 

2.9%

 

0.5%

 

3.5%

Expenses

 

2.7%

 

(2.6%)

 

2.0%

NOI

 

3.0%

 

2.0%

 

4.3%

The following table reflects the detail of the change in Same Store Residential Revenues, which is presented on a GAAP basis showing Leasing Concessions on a straight-line basis.

 

 

Second Quarter 2024 vs.

Second Quarter 2023

 

Second Quarter 2024 vs.

First Quarter 2024

 

June YTD 2024 vs.

June YTD 2023

 

 

% Change

 

% Change

 

% Change

Same Store Residential Revenues-

 

 

 

 

 

 

 

 

comparable period

Lease rates

 

 

2.5

%

 

 

0.7

%

 

 

2.7

%

Leasing Concessions

 

 

(0.3

%)

 

 

0.0

%

 

 

(0.3

%)

Vacancy gain (loss)

 

 

0.4

%

 

 

(0.1

%)

 

 

0.4

%

Bad Debt, Net (1)

 

 

0.2

%

 

 

0.2

%

 

 

0.2

%

Other (2)

 

 

0.2

%

 

 

0.2

%

 

 

0.4

%

Same Store Residential Revenues-

 

current period

 

3.0

%

 

 

1.0

%

 

 

3.4

%

(1)

Change in rental income due to bad debt write-offs and reserves, net of amounts (including governmental rental assistance payments) collected on previously written-off or reserved accounts. See page 13 for more detail.

(2)

Includes ancillary income, utility recoveries, early lease termination income, miscellaneous income and other items.

See page 12 for detail and reconciliations of Same Store Residential Revenues on a GAAP basis to Same Store Residential Revenues with Leasing Concessions on a cash basis.

Residential Same Store Operating Statistics

The following table includes select operating metrics for Residential Same Store Properties (for 77,054 same store apartment units):

 

 

Q2 2024

 

Q1 2024

Physical Occupancy

 

96.4%

 

96.3%

Percentage of Residents Renewing by quarter

57.6%

 

61.1%

 

 

 

 

 

New Lease Change

 

0.2%

 

(2.2%)

Renewal Rate Achieved

 

5.0%

 

4.7%

Blended Rate (1)

 

2.9%

 

1.6%

(1)

Blended Rates for Established Markets were 3.3% and 1.8% for Q2 2024 and Q1 2024, respectively. See page 17.

June 2024 Blended Rate improved relative to April and May 2024. July 2024 Blended Rate is performing in line with the second quarter of 2024 and is consistent with expectations for this time of year. Management expects the third quarter of 2024 Blended Rate to increase between 2.0% and 3.0% which reflects typical seasonal moderation after the prime leasing season.

Investment Activity

Subsequent to the end of the second quarter of 2024, the Company acquired two properties consisting of 644 apartment units, located in Atlanta and Dallas/Ft. Worth, for an aggregate acquisition price of $216.8 million. The Company is also under contract to acquire an additional property consisting of 202 apartment units, located in Denver, for an acquisition price of $77.0 million.

During the second quarter of 2024, the Company acquired a 160 apartment unit property, located in suburban Boston and completed in 2023, for approximately $62.6 million at an Acquisition Cap Rate of 5.7%. During the second quarter of 2024, the Company sold two properties - one in suburban Washington, D.C. and one in San Francisco - consisting of 327 total apartment units, for an aggregate sale price of approximately $85.5 million at a weighted average Disposition Yield of 6.2%. The average age of the properties sold in the second quarter of 2024 was approximately 35 years.

During the first six months of 2024, the Company acquired the one property in suburban Boston described above. Also during the first six months of 2024, the Company sold five properties consisting of 831 apartment units, for an aggregate sale price of approximately $334.0 million at a weighted average Disposition Yield of 5.7%.

Third Quarter 2024 Guidance

The Company has established guidance ranges for the third quarter of 2024 EPS, FFO per share and Normalized FFO per share as listed below:

 

 

Q3 2024

Guidance

EPS

 

$0.49 to $0.53

FFO per share

 

$0.94 to $0.98

Normalized FFO per share

 

$0.96 to $1.00

The difference between the second quarter of 2024 actual EPS of $0.47 and the third quarter of 2024 EPS guidance midpoint of $0.51 is due primarily to higher expected property sale gains and the items described below.

The difference between the second quarter of 2024 actual FFO of $0.94 per share and the third quarter of 2024 FFO guidance midpoint of $0.96 per share is due primarily to the items described below.

The difference between the second quarter of 2024 actual Normalized FFO of $0.97 per share and the third quarter of 2024 Normalized FFO guidance midpoint of $0.98 per share is due primarily to:

 

 

Expected

Positive/(Negative)

Impact

 

 

Third Quarter 2024 vs.

Second Quarter 2024

Interest expense, net

 

$

(0.01

)

Corporate overhead

 

 

0.02

 

Net

 

$

0.01

 

About Equity Residential

Equity Residential is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract affluent long-term renters. Equity Residential owns or has investments in 299 properties consisting of 79,738 apartment units, with an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin. For more information on Equity Residential, please visit our website at www.equityapartments.com.

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements and information within the meaning of the federal securities laws. These statements are based on current expectations, estimates, projections and assumptions made by management. While Equity Residential’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, including, without limitation, changes in general market conditions, including the rate of job growth and cost of labor and construction material, the level of new multifamily construction and development, government regulations and competition. These and other risks and uncertainties are described under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.com. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

A live web cast of the Company’s conference call discussing these results will take place tomorrow, Tuesday, July 30, 2024 at 10:00 a.m. CT. Please visit the Investor section of the Company’s website at www.equityapartments.com for the webcast link.

Equity Residential

Consolidated Statements of Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

Quarter Ended June 30,

 

 

2024

 

2023

 

2024

 

2023

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

1,464,981

 

 

$

1,422,397

 

 

$

734,163

 

 

$

717,309

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Property and maintenance

 

 

261,128

 

 

 

262,350

 

 

 

126,498

 

 

 

124,771

 

Real estate taxes and insurance

 

 

214,498

 

 

 

209,749

 

 

 

105,571

 

 

 

103,080

 

Property management

 

 

68,969

 

 

 

62,145

 

 

 

33,511

 

 

 

30,679

 

General and administrative

 

 

34,351

 

 

 

35,041

 

 

 

18,631

 

 

 

18,876

 

Depreciation

 

 

450,093

 

 

 

437,185

 

 

 

224,398

 

 

 

221,355

 

Total expenses

 

 

1,029,039

 

 

 

1,006,470

 

 

 

508,609

 

 

 

498,761

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on sales of real estate properties

 

 

227,994

 

 

 

100,122

 

 

 

39,809

 

 

 

(87

)

Interest and other income

 

 

10,657

 

 

 

3,669

 

 

 

1,328

 

 

 

2,131

 

Other expenses

 

 

(45,123

)

 

 

(15,559

)

 

 

(13,385

)

 

 

(6,564

)

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

Expense incurred, net

 

 

(133,040

)

 

 

(131,991

)

 

 

(65,828

)

 

 

(65,590

)

Amortization of deferred financing costs

 

 

(3,836

)

 

 

(3,996

)

 

 

(1,918

)

 

 

(2,017

)

Income before income and other taxes, income (loss) from

 

investments in unconsolidated entities and net gain (loss)

on sales of land parcels

 

 

492,594

 

 

 

368,172

 

 

 

185,560

 

 

 

146,421

 

Income and other tax (expense) benefit

 

 

(635

)

 

 

(634

)

 

 

(331

)

 

 

(336

)

Income (loss) from investments in unconsolidated entities

 

 

(3,372

)

 

 

(2,605

)

 

 

(1,674

)

 

 

(1,223

)

Net income

 

 

488,587

 

 

 

364,933

 

 

 

183,555

 

 

 

144,862

 

Net (income) loss attributable to Noncontrolling Interests:

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

(13,278

)

 

 

(11,613

)

 

 

(5,003

)

 

 

(4,554

)

Partially Owned Properties

 

 

(2,039

)

 

 

(2,082

)

 

 

(1,069

)

 

 

(1,105

)

Net income attributable to controlling interests

 

 

473,270

 

 

 

351,238

 

 

 

177,483

 

 

 

139,203

 

Preferred distributions

 

 

(902

)

 

 

(1,545

)

 

 

(355

)

 

 

(773

)

Premium on redemption of Preferred Shares

 

 

(1,444

)

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

470,924

 

 

$

349,693

 

 

$

177,128

 

 

$

138,430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – basic:

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

1.24

 

 

$

0.92

 

 

$

0.47

 

 

$

0.37

 

Weighted average Common Shares outstanding

 

 

378,699

 

 

 

378,492

 

 

 

378,578

 

 

 

378,642

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

1.24

 

 

$

0.92

 

 

$

0.47

 

 

$

0.37

 

Weighted average Common Shares outstanding

 

 

390,548

 

 

 

391,063

 

 

 

390,542

 

 

 

391,187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per Common Share outstanding

 

$

1.35

 

 

$

1.325

 

 

$

0.675

 

 

$

0.6625

 

Equity Residential

Consolidated Statements of Funds From Operations and Normalized Funds From Operations

(Amounts in thousands except per share and Unit data)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

Quarter Ended June 30,

 

 

2024

 

2023

 

2024

 

2023

Net income

 

$

488,587

 

 

$

364,933

 

 

$

183,555

 

 

$

144,862

 

Net (income) loss attributable to Noncontrolling Interests – Partially

 

Owned Properties

 

(2,039

)

 

 

(2,082

)

 

 

(1,069

)

 

 

(1,105

)

Preferred distributions

 

 

(902

)

 

 

(1,545

)

 

 

(355

)

 

 

(773

)

Premium on redemption of Preferred Shares

 

 

(1,444

)

 

 

 

 

 

 

 

 

 

Net income available to Common Shares and Units

 

 

484,202

 

 

 

361,306

 

 

 

182,131

 

 

 

142,984

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

450,093

 

 

 

437,185

 

 

 

224,398

 

 

 

221,355

 

Depreciation – Non-real estate additions

 

 

(1,897

)

 

 

(2,259

)

 

 

(942

)

 

 

(1,103

)

Depreciation – Partially Owned Properties

 

 

(1,089

)

 

 

(1,055

)

 

 

(547

)

 

 

(510

)

Depreciation – Unconsolidated Properties

 

 

1,452

 

 

 

1,226

 

 

 

1,117

 

 

 

594

 

Net (gain) loss on sales of real estate properties

 

 

(227,994

)

 

 

(100,122

)

 

 

(39,809

)

 

 

87

 

FFO available to Common Shares and Units

 

 

704,767

 

 

 

696,281

 

 

 

366,348

 

 

 

363,407

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (see note for additional detail):

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs

 

 

1,369

 

 

 

1,993

 

 

 

821

 

 

 

661

 

Debt extinguishment and preferred share redemption (gains)

 

losses

 

 

1,444

 

 

 

47

 

 

 

 

 

 

47

 

Non-operating asset (gains) losses

 

 

(3,216

)

 

 

1,031

 

 

 

2,890

 

 

 

317

 

Other miscellaneous items

 

 

40,674

 

 

 

11,343

 

 

 

10,083

 

 

 

5,051

 

Normalized FFO available to Common Shares and Units

 

$

745,038

 

 

$

710,695

 

 

$

380,142

 

 

$

369,483

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

707,113

 

 

$

697,826

 

 

$

366,703

 

 

$

364,180

 

Preferred distributions

 

 

(902

)

 

 

(1,545

)

 

 

(355

)

 

 

(773

)

Premium on redemption of Preferred Shares

 

 

(1,444

)

 

 

 

 

 

 

 

 

 

FFO available to Common Shares and Units

 

$

704,767

 

 

$

696,281

 

 

$

366,348

 

 

$

363,407

 

FFO per share and Unit – basic

 

$

1.81

 

 

$

1.79

 

 

$

0.94

 

 

$

0.93

 

FFO per share and Unit – diluted

 

$

1.80

 

 

$

1.78

 

 

$

0.94

 

 

$

0.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO

 

$

745,940

 

 

$

712,240

 

 

$

380,497

 

 

$

370,256

 

Preferred distributions

 

 

(902

)

 

 

(1,545

)

 

 

(355

)

 

 

(773

)

Normalized FFO available to Common Shares and Units

 

$

745,038

 

 

$

710,695

 

 

$

380,142

 

 

$

369,483

 

Normalized FFO per share and Unit – basic

 

$

1.91

 

 

$

1.82

 

 

$

0.98

 

 

$

0.95

 

Normalized FFO per share and Unit – diluted

 

$

1.91

 

 

$

1.82

 

 

$

0.97

 

 

$

0.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average Common Shares and Units outstanding – basic

 

 

389,380

 

 

 

389,942

 

 

 

389,271

 

 

 

390,032

 

Weighted average Common Shares and Units outstanding – diluted

 

390,548

 

 

 

391,063

 

 

 

390,542

 

 

 

391,187

 

Note: See Adjustments from FFO to Normalized FFO for additional detail regarding the adjustments from FFO to Normalized FFO. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of EPS to FFO per share and Normalized FFO per share.

Equity Residential

Consolidated Balance Sheets

(Amounts in thousands except for share amounts)

(Unaudited)

 

 

 

June 30,

 

December 31,

 

 

2024

 

2023

ASSETS

 

 

 

 

 

 

Land

 

$

5,540,352

 

 

$

5,581,876

 

Depreciable property

 

 

23,004,377

 

 

 

22,938,426

 

Projects under development

 

 

188,283

 

 

 

78,036

 

Land held for development

 

 

64,781

 

 

 

114,300

 

Investment in real estate

 

 

28,797,793

 

 

 

28,712,638

 

Accumulated depreciation

 

 

(10,163,756

)

 

 

(9,810,337

)

Investment in real estate, net

 

 

18,634,037

 

 

 

18,902,301

 

Investments in unconsolidated entities1

 

 

341,871

 

 

 

282,049

 

Cash and cash equivalents

 

 

38,298

 

 

 

50,743

 

Restricted deposits

 

 

100,123

 

 

 

89,252

 

Right-of-use assets

 

 

450,796

 

 

 

457,266

 

Other assets

 

 

214,443

 

 

 

252,953

 

Total assets

 

$

19,779,568

 

 

$

20,034,564

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Mortgage notes payable, net

 

$

1,634,838

 

 

$

1,632,902

 

Notes, net

 

 

5,351,461

 

 

 

5,348,417

 

Line of credit and commercial paper

 

 

170,884

 

 

 

409,131

 

Accounts payable and accrued expenses

 

 

114,413

 

 

 

87,377

 

Accrued interest payable

 

 

65,585

 

 

 

65,716

 

Lease liabilities

 

 

309,182

 

 

 

311,640

 

Other liabilities

 

 

292,424

 

 

 

272,596

 

Security deposits

 

 

69,848

 

 

 

69,178

 

Distributions payable

 

 

263,668

 

 

 

259,231

 

Total liabilities

 

 

8,272,303

 

 

 

8,456,188

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interests – Operating Partnership

 

 

327,641

 

 

 

289,248

 

Equity:

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

Preferred Shares of beneficial interest, $0.01 par value;

 

100,000,000 shares authorized; 343,100 shares issued and

outstanding as of June 30, 2024 and 745,600 shares issued

and outstanding as of December 31, 2023

 

 

17,155

 

 

 

37,280

 

Common Shares of beneficial interest, $0.01 par value;

 

1,000,000,000 shares authorized; 379,086,882 shares issued

and outstanding as of June 30, 2024 and 379,291,417

shares issued and outstanding as of December 31, 2023

 

 

3,791

 

 

 

3,793

 

Paid in capital

 

 

9,590,105

 

 

 

9,601,866

 

Retained earnings

 

 

1,357,922

 

 

 

1,437,185

 

Accumulated other comprehensive income (loss)

 

 

6,914

 

 

 

5,704

 

Total shareholders’ equity

 

 

10,975,887

 

 

 

11,085,828

 

Noncontrolling Interests:

 

 

 

 

 

 

Operating Partnership

 

 

204,032

 

 

 

202,306

 

Partially Owned Properties

 

 

(295

)

 

 

994

 

Total Noncontrolling Interests

 

 

203,737

 

 

 

203,300

 

Total equity

 

 

11,179,624

 

 

 

11,289,128

 

Total liabilities and equity

 

$

19,779,568

 

 

$

20,034,564

 

1 Includes $279.8 million and $220.2 million in unconsolidated development projects as of June 30, 2024 and December 31, 2023, respectively. See Development and Lease-Up Projects for additional detail on unconsolidated projects.

Equity Residential

Portfolio Summary

As of June 30, 2024

 

 

 

 

 

 

 

 

% of

Stabilized

 

Average

 

 

 

 

 

Apartment

 

Budgeted

 

Rental

Markets/Metro Areas

 

Properties

 

Units

 

NOI

 

Rate

Established Markets:

 

 

 

 

 

 

 

 

 

 

 

 

Los Angeles

 

 

58

 

 

 

14,732

 

 

 

17.3

%

 

$

2,936

 

Orange County

 

 

12

 

 

 

3,718

 

 

 

5.0

%

 

 

2,914

 

San Diego

 

 

12

 

 

 

2,878

 

 

 

4.0

%

 

 

3,127

 

Subtotal – Southern California

 

 

82

 

 

 

21,328

 

 

 

26.3

%

 

 

2,958

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Washington, D.C.

 

 

47

 

 

 

14,866

 

 

 

16.2

%

 

 

2,703

 

San Francisco

 

 

41

 

 

 

11,410

 

 

 

15.2

%

 

 

3,323

 

New York

 

 

34

 

 

 

8,536

 

 

 

14.2

%

 

 

4,610

 

Boston

 

 

27

 

 

 

7,237

 

 

 

11.9

%

 

 

3,595

 

Seattle

 

 

44

 

 

 

9,267

 

 

 

10.5

%

 

 

2,604

 

Subtotal – Established Markets

 

 

275

 

 

 

72,644

 

 

 

94.3

%

 

 

3,177

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expansion Markets:

 

 

 

 

 

 

 

 

 

 

 

 

Denver

 

 

10

 

 

 

3,001

 

 

 

3.0

%

 

 

2,407

 

Atlanta

 

 

7

 

 

 

2,111

 

 

 

1.6

%

 

 

2,050

 

Dallas/Ft. Worth

 

 

4

 

 

 

1,241

 

 

 

0.7

%

 

 

1,912

 

Austin

 

 

3

 

 

 

741

 

 

 

0.4

%

 

 

1,798

 

Subtotal – Expansion Markets

 

 

24

 

 

 

7,094

 

 

 

5.7

%

 

 

2,152

 

Total

 

 

299

 

 

 

79,738

 

 

 

100.0

%

 

$

3,087

 

 

 

 

Properties

 

Apartment Units

Wholly Owned Properties

 

284

 

76,469

Partially Owned Properties – Consolidated

 

14

 

3,060

Partially Owned Properties – Unconsolidated

 

1

 

209

 

 

299

 

79,738

Note: Projects under development are not included in the Portfolio Summary until construction has been completed.

Equity Residential

Portfolio Rollforward Q2 2024

($ in thousands)

 

 

 

Properties

 

Apartment

Units

 

Purchase Price

 

Acquisition

Cap Rate

3/31/2024

 

 

299

 

 

 

79,688

 

 

 

 

 

 

 

Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties – Not Stabilized (1)

 

 

1

 

 

 

160

 

 

$

62,595

 

 

 

5.7

%

Unconsolidated Land Parcels (2)

 

 

 

 

 

 

 

$

33,394

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Price

 

Disposition

Yield

Dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties

 

 

(2

)

 

 

(327

)

 

$

(85,500

)

 

 

(6.2

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Completed Developments – Unconsolidated

 

 

1

 

 

 

209

 

 

 

 

 

 

 

Configuration Changes

 

 

 

 

 

8

 

 

 

 

 

 

 

6/30/2024

 

 

299

 

 

 

79,738

 

 

 

 

 

 

 

 

Portfolio Rollforward 2024

($ in thousands)

 

 

 

Properties

 

Apartment

Units

 

Purchase

Price

 

Acquisition

Cap Rate

12/31/2023

 

 

302

 

 

 

80,191

 

 

 

 

 

 

 

Acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties – Not Stabilized (1)

 

 

1

 

 

 

160

 

 

$

62,595

 

 

 

5.7

%

Unconsolidated Land Parcels (2)

 

 

 

 

 

 

 

$

33,394

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales Price

 

Disposition

Yield

Dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Rental Properties

 

 

(5

)

 

 

(831

)

 

$

(334,000

)

 

 

(5.7

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Completed Developments – Unconsolidated

 

 

1

 

 

 

209

 

 

 

 

 

 

 

Configuration Changes

 

 

 

 

 

9

 

 

 

 

 

 

 

6/30/2024

 

 

299

 

 

 

79,738

 

 

 

 

 

 

 

(1)

The Company acquired one property in the Boston market in the second quarter of 2024 that is in lease-up and is expected to stabilize in its second year of ownership at the Acquisition Cap Rate listed above.

(2)

The Company previously entered into separate unconsolidated joint ventures for the purpose of developing vacant land parcels in suburban Boston, MA and suburban Seattle, WA. The joint ventures acquired their respective land parcels during the second quarter of 2024 for the total purchase price listed. The Company's total investment in these two joint ventures is approximately $53.0 million as of June 30, 2024

Equity Residential

Second Quarter 2024 vs. Second Quarter 2023

Same Store Results/Statistics Including 77,054 Same Store Apartment Units

(includes Residential and Non-Residential)

($ in thousands except for Average Rental Rate)

 

 

 

Results

 

Statistics

Description

 

Revenues

 

Expenses

 

NOI

 

Average

Rental

Rate

 

Physical

Occupancy

 

Turnover

Q2 2024

 

$

718,169

 

 

$

224,525

 

 

$

493,644

 

 

$

3,107

 

 

 

96.4

%

 

 

11.7

%

Q2 2023

 

$

697,784

 

 

$

218,681

 

 

$

479,103

 

 

$

3,031

 

 

 

95.9

%

 

 

11.6

%

Change

 

$

20,385

 

 

$

5,844

 

 

$

14,541

 

 

$

76

 

 

 

0.5

%

 

 

0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

 

2.9

%

 

 

2.7

%

 

 

3.0

%

 

 

2.5

%

 

 

 

 

 

 

 

Second Quarter 2024 vs. First Quarter 2024

Same Store Results/Statistics Including 77,893 Same Store Apartment Units

(includes Residential and Non-Residential)

($ in thousands except for Average Rental Rate)

 

 

 

Results

 

Statistics

Description

 

Revenues

 

Expenses

 

NOI

 

Average

Rental

Rate

 

Physical

Occupancy

 

Turnover

Q2 2024

 

$

723,146

 

 

$

226,320

 

 

$

496,826

 

 

$

3,096

 

 

 

96.4

%

 

 

11.7

%

Q1 2024

 

$

719,329

 

 

$

232,422

 

 

$

486,907

 

 

$

3,069

 

 

 

96.3

%

 

 

8.6

%

Change

 

$

3,817

 

 

$

(6,102

)

 

$

9,919

 

 

$

27

 

 

 

0.1

%

 

 

3.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

 

0.5

%

 

 

(2.6

%)

 

 

2.0

%

 

 

0.9

%

 

 

 

 

 

 

 

June YTD 2024 vs. June YTD 2023

Same Store Results/Statistics Including 77,054 Same Store Apartment Units

(includes Residential and Non-Residential)

($ in thousands except for Average Rental Rate)

 

 

 

Results

 

 

Statistics

 

Description

 

Revenues

 

 

Expenses

 

 

NOI

 

 

Average

Rental

Rate

 

 

Physical

Occupancy

 

 

Turnover

 

June YTD 2024

 

$

1,432,565

 

 

$

455,437

 

 

$

977,128

 

 

$

3,093

 

 

 

96.3

%

 

 

20.2

%

June YTD 2023

 

$

1,383,857

 

 

$

446,721

 

 

$

937,136

 

 

$

3,004

 

 

 

95.9

%

 

 

20.7

%

Change

 

$

48,708

 

 

$

8,716

 

 

$

39,992

 

 

$

89

 

 

 

0.4

%

 

 

(0.5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change

 

 

3.5

%

 

 

2.0

%

 

 

4.3

%

 

 

3.0

%

 

 

 

 

 

 

Equity Residential

Same Store Residential Revenues – GAAP to Cash Basis (1)

($ in thousands)

 

 

Second Quarter 2024 vs. Second Quarter 2023

 

Second Quarter 2024 vs. First Quarter 2024

 

June YTD 2024 vs. June YTD 2023

 

77,054 Same Store Apartment Units

 

77,893 Same Store Apartment Units

 

77,054 Same Store Apartment Units

 

Q2 2024

 

Q2 2023

 

Q2 2024

 

Q1 2024

 

June YTD 2024

 

June YTD 2023

Same Store Residential Revenues (GAAP Basis)

$

691,798

 

 

$

671,601

 

 

$

696,769

 

 

$

689,803

 

 

$

1,376,668

 

 

$

1,330,997

 

Leasing Concessions amortized

 

4,911

 

 

 

3,179

 

 

 

5,014

 

 

 

5,155

 

 

 

9,964

 

 

 

5,940

 

Leasing Concessions granted (2)

 

(3,702

)

 

 

(4,004

)

 

 

(3,815

)

 

 

(4,935

)

 

 

(8,620

)

 

 

(8,162

)

Same Store Residential Revenues with Leasing

 

Concessions on a cash basis

$

693,007

 

 

$

670,776

 

 

$

697,968

 

 

$

690,023

 

 

$

1,378,012

 

 

$

1,328,775

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% change - GAAP revenue

 

3.0

%

 

 

 

 

 

1.0

%

 

 

 

 

 

3.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% change - cash revenue

 

3.3

%

 

 

 

 

 

1.2

%

 

 

 

 

 

3.7

%

 

 

 

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional detail.

(2)

Concession usage is primarily concentrated in San Francisco, Los Angeles and Seattle.

Same Store Net Operating Income By Quarter

Including 77,054 Same Store Apartment Units

(includes Residential and Non-Residential)

($ in thousands)

 

 

 

Q2 2024

 

Q1 2024

 

Q4 2023

 

Q3 2023

 

Q2 2023

Same store revenues

 

$

718,169

 

 

$

714,396

 

 

$

706,419

 

 

$

702,251

 

 

$

697,784

 

Same store expenses

 

 

224,525

 

 

 

230,912

 

 

 

216,956

 

 

 

222,907

 

 

 

218,681

 

Same store NOI

 

$

493,644

 

 

$

483,484

 

 

$

489,463

 

 

$

479,344

 

 

$

479,103

 

Equity Residential

Same Store Residential Accounts Receivable Balances

Including 77,054 Same Store Apartment Units

($ in thousands)

 

Balance Sheet (Other assets):

 

June 30, 2024

 

March 31, 2024

 

June 30, 2023

Residential accounts receivable balances

 

$

16,271

 

 

$

18,120

 

 

$

26,534

 

Allowance for doubtful accounts

 

 

(11,147

)

 

 

(13,063

)

 

 

(22,217

)

Net receivable balances

$

5,124

 

 

$

5,057

 

 

$

4,317

 

 

 

 

 

 

 

 

 

 

 

Straight-line receivable balances

 

$

7,088

 

(1)

$

8,297

 

 

$

6,506

 

(1)

Total same store Residential Leasing Concessions granted in the second quarter of 2024 were approximately $3.7 million. The straight-line receivable balance of $7.1 million reflects Residential Leasing Concessions that the Company expects will be primarily recognized as a reduction of rental revenues in the remainder of 2024 and the first half of 2025.

Same Store Residential Bad Debt

Including 77,054 Same Store Apartment Units

($ in thousands)

 

Income Statement (Rental income):

 

Q2 2024

 

 

Q1 2024

 

 

Q2 2023

 

Bad debts before governmental rental assistance

 

$

8,066

 

 

$

9,141

 

 

$

9,483

 

Governmental rental assistance received

 

(413

)

 

 

(430

)

 

 

(660

)

Bad Debt, Net

 

$

7,653

 

 

$

8,711

 

 

$

8,823

 

 

 

 

 

 

 

 

 

 

 

Bad Debt, Net as a % of Same Store Residential Revenues

 

1.1

%

 

 

1.3

%

 

 

1.3

%

Equity Residential

Second Quarter 2024 vs. Second Quarter 2023

Same Store Residential Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Year's Quarter

Markets/Metro Areas

 

Apartment

Units

 

Q2 2024

% of

Actual

NOI

 

Q2 2024

Average

Rental

Rate

 

Q2 2024

Weighted

Average

Physical

Occupancy %

 

Q2 2024

Turnover

 

Revenues

 

Expenses

 

NOI

 

Average

Rental

Rate

 

Physical

Occupancy

 

Turnover

Los Angeles

 

 

14,135

 

 

 

17.6

%

 

$

2,933

 

 

 

95.7

%

 

 

11.7

%

 

 

3.3

%

 

 

1.4

%

 

 

4.2

%

 

 

2.5

%

 

 

0.7

%

 

 

0.3

%

Orange County

 

 

3,718

 

 

 

5.1

%

 

 

2,914

 

 

 

95.9

%

 

 

10.8

%

 

 

3.7

%

 

 

3.5

%

 

 

3.8

%

 

 

3.8

%

 

 

0.0

%

 

 

0.2

%

San Diego

 

 

2,878

 

 

 

4.2

%

 

 

3,127

 

 

 

95.9

%

 

 

11.6

%

 

 

4.5

%

 

 

0.8

%

 

 

5.6

%

 

 

4.4

%

 

 

0.1

%

 

 

1.7

%

Subtotal – Southern California

 

20,731

 

 

 

26.9

%

 

 

2,957

 

 

 

95.8

%

 

 

11.5

%

 

 

3.6

%

 

 

1.6

%

 

 

4.3

%

 

 

3.0

%

 

 

0.5

%

 

 

0.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Washington, D.C.

 

 

14,554

 

 

 

16.6

%

 

 

2,707

 

 

 

97.0

%

 

 

11.4

%

 

 

4.8

%

 

 

2.4

%

 

 

5.9

%

 

 

4.6

%

 

 

0.2

%

 

 

0.8

%

San Francisco

 

 

11,188

 

 

 

16.1

%

 

 

3,323

 

 

 

96.1

%

 

 

11.6

%

 

 

1.3

%

 

 

(2.0

%)

 

 

2.7

%

 

 

0.8

%

 

 

0.4

%

 

 

0.7

%

New York

 

 

8,536

 

 

 

14.1

%

 

 

4,610

 

 

 

97.4

%

 

 

9.5

%

 

 

3.1

%

 

 

5.0

%

 

 

1.7

%

 

 

2.7

%

 

 

0.3

%

 

 

(0.6

%)

Boston

 

 

7,077

 

 

 

11.3

%

 

 

3,609

 

 

 

96.7

%

 

 

11.4

%

 

 

4.2

%

 

 

5.0

%

 

 

4.0

%

 

 

4.0

%

 

 

0.2

%

 

 

(0.2

%)

Seattle

 

 

9,266

 

 

 

10.3

%

 

 

2,604

 

 

 

96.2

%

 

 

12.4

%

 

 

1.5

%

 

 

4.8

%

 

 

0.2

%

 

 

0.3

%

 

 

1.1

%

 

 

(2.0

%)

Denver

 

 

2,505

 

 

 

2.6

%

 

 

2,428

 

 

 

96.8

%

 

 

14.3

%

 

 

1.0

%

 

 

0.0

%

 

 

1.4

%

 

 

0.6

%

 

 

0.6

%

 

 

(2.8

%)

Other Expansion Markets

 

 

3,197

 

 

 

2.1

%

 

 

1,970

 

 

 

95.1

%

 

 

16.2

%

 

 

(0.7

%)

 

 

5.2

%

 

 

(4.9

%)

 

 

(1.0

%)

 

 

0.2

%

 

 

1.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

77,054

 

 

 

100.0

%

 

$

3,107

 

 

 

96.4

%

 

 

11.7

%

 

 

3.0

%

 

 

2.6

%

 

 

3.2

%

 

 

2.5

%

 

 

0.5

%

 

 

0.1

%

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the six months ended June 30, 2024.

Equity Residential

Second Quarter 2024 vs. First Quarter 2024

Same Store Residential Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Quarter

Markets/Metro Areas

 

Apartment

Units

 

Q2 2024

% of

Actual

NOI

 

Q2 2024

Average

Rental

Rate

 

Q2 2024

Weighted

Average

Physical

Occupancy %

 

Q2 2024

Turnover

 

Revenues

 

Expenses

 

NOI

 

Average

Rental

Rate

 

Physical

Occupancy

 

Turnover

Los Angeles

 

 

14,135

 

 

 

17.5

%

 

$

2,933

 

 

 

95.7

%

 

 

11.7

%

 

 

0.7

%

 

 

(5.6

%)

 

 

3.5

%

 

 

0.4

%

 

 

0.2

%

 

 

2.1

%

Orange County

 

 

3,718

 

 

 

5.1

%

 

 

2,914

 

 

 

95.9

%

 

 

10.8

%

 

 

0.2

%

 

 

0.2

%

 

 

0.2

%

 

 

0.5

%

 

 

(0.2

%)

 

 

3.4

%

San Diego

 

 

2,878

 

 

 

4.2

%

 

 

3,127

 

 

 

95.9

%

 

 

11.6

%

 

 

0.6

%

 

 

(1.7

%)

 

 

1.3

%

 

 

0.8

%

 

 

(0.2

%)

 

 

3.6

%

Subtotal – Southern California

 

20,731

 

 

 

26.8

%

 

 

2,957

 

 

 

95.8

%

 

 

11.5

%

 

 

0.6

%

 

 

(4.3

%)

 

 

2.5

%

 

 

0.5

%

 

 

0.1

%

 

 

2.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Washington, D.C.

 

 

14,554

 

 

 

16.4

%

 

 

2,707

 

 

 

97.0

%

 

 

11.4

%

 

 

1.5

%

 

 

0.9

%

 

 

1.7

%

 

 

1.6

%

 

 

(0.1

%)

 

 

4.4

%

San Francisco

 

 

11,188

 

 

 

16.0

%

 

 

3,323

 

 

 

96.1

%

 

 

11.6

%

 

 

0.5

%

 

 

(9.1

%)

 

 

4.9

%

 

 

0.9

%

 

 

(0.4

%)

 

 

2.1

%

New York

 

 

8,536

 

 

 

14.0

%

 

 

4,610

 

 

 

97.4

%

 

 

9.5

%

 

 

0.7

%

 

 

(2.6

%)

 

 

3.2

%

 

 

0.4

%

 

 

0.4

%

 

 

3.0

%

Boston

 

 

7,077

 

 

 

11.2

%

 

 

3,609

 

 

 

96.7

%

 

 

11.4

%

 

 

2.6

%

 

 

(2.6

%)

 

 

4.7

%

 

 

1.5

%

 

 

1.0

%

 

 

4.0

%

Seattle

 

 

9,266

 

 

 

10.2

%

 

 

2,604

 

 

 

96.2

%

 

 

12.4

%

 

 

1.5

%

 

 

2.5

%

 

 

1.1

%

 

 

1.3

%

 

 

0.1

%

 

 

2.7

%

Denver

 

 

2,792

 

 

 

2.9

%

 

 

2,417

 

 

 

96.8

%

 

 

14.0

%

 

 

0.9

%

 

 

(4.0

%)

 

 

3.1

%

 

 

0.3

%

 

 

0.6

%

 

 

3.5

%

Other Expansion Markets

 

 

3,749

 

 

 

2.5

%

 

 

1,963

 

 

 

95.2

%

 

 

16.2

%

 

 

(0.2

%)

 

 

4.5

%

 

 

(3.7

%)

 

 

(0.2

%)

 

 

0.0

%

 

 

3.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

77,893

 

 

 

100.0

%

 

$

3,096

 

 

 

96.4

%

 

 

11.7

%

 

 

1.0

%

 

 

(2.7

%)

 

 

2.8

%

 

 

0.9

%

 

 

0.1

%

 

 

3.1

%

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the six months ended June 30, 2024.

Equity Residential

June YTD 2024 vs. June YTD 2023

Same Store Residential Results/Statistics by Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) from Prior Year

Markets/Metro Areas

 

Apartment

Units

 

June YTD 24

% of

Actual

NOI

 

June YTD 24

Average

Rental

Rate

 

June YTD 24

Weighted

Average

Physical

Occupancy %

 

June YTD 24

Turnover

 

Revenues

 

Expenses

 

NOI

 

Average

Rental

Rate

 

Physical

Occupancy

 

Turnover

Los Angeles

 

 

14,135

 

 

 

17.5

%

 

$

2,927

 

 

 

95.6

%

 

 

21.3

%

 

 

4.2

%

 

 

1.4

%

 

 

5.5

%

 

 

3.9

%

 

 

0.4

%

 

 

(0.1

%)

Orange County

 

 

3,718

 

 

 

5.2

%

 

 

2,907

 

 

 

96.0

%

 

 

18.2

%

 

 

4.8

%

 

 

3.5

%

 

 

5.2

%

 

 

4.9

%

 

 

(0.1

%)

 

 

0.2

%

San Diego

 

 

2,878

 

 

 

4.3

%

 

 

3,115

 

 

 

96.0

%

 

 

19.6

%

 

 

5.5

%

 

 

0.9

%

 

 

6.9

%

 

 

5.0

%

 

 

0.4

%

 

 

0.0

%

Subtotal – Southern California

 

20,731

 

 

 

27.0

%

 

 

2,950

 

 

 

95.7

%

 

 

20.5

%

 

 

4.5

%

 

 

1.7

%

 

 

5.7

%

 

 

4.2

%

 

 

0.3

%

 

 

0.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Washington, D.C.

 

 

14,554

 

 

 

16.7

%

 

 

2,686

 

 

 

97.0

%

 

 

18.4

%

 

 

5.1

%

 

 

0.3

%

 

 

7.5

%

 

 

4.8

%

 

 

0.3

%

 

 

0.5

%

San Francisco

 

 

11,188

 

 

 

15.9

%

 

 

3,308

 

 

 

96.3

%

 

 

21.1

%

 

 

1.7

%

 

 

0.0

%

 

 

2.4

%

 

 

1.1

%

 

 

0.6

%

 

 

0.8

%

New York

 

 

8,536

 

 

 

14.1

%

 

 

4,601

 

 

 

97.2

%

 

 

16.1

%

 

 

3.5

%

 

 

4.1

%

 

 

3.1

%

 

 

3.2

%

 

 

0.3

%

 

 

(1.5

%)

Boston

 

 

7,077

 

 

 

11.2

%

 

 

3,583

 

 

 

96.2

%

 

 

18.8

%

 

 

4.5

%

 

 

1.2

%

 

 

5.9

%

 

 

4.3

%

 

 

0.2

%

 

 

(0.8

%)

Seattle

 

 

9,266

 

 

 

10.4

%

 

 

2,587

 

 

 

96.2

%

 

 

22.2

%

 

 

1.0

%

 

 

4.9

%

 

 

(0.6

%)

 

 

(0.1

%)

 

 

1.1

%

 

 

(3.3

%)

Denver

 

 

2,505

 

 

 

2.6

%

 

 

2,421

 

 

 

96.5

%

 

 

24.4

%

 

 

1.1

%

 

 

(0.2

%)

 

 

1.7

%

 

 

1.1

%

 

 

0.2

%

 

 

(3.8

%)

Other Expansion Markets

 

 

3,197

 

 

 

2.1

%

 

 

1,972

 

 

 

95.3

%

 

 

29.5

%

 

 

0.1

%

 

 

0.3

%

 

 

0.0

%

 

 

(0.5

%)

 

 

0.4

%

 

 

2.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

77,054

 

 

 

100.0

%

 

$

3,093

 

 

 

96.3

%

 

 

20.2

%

 

 

3.4

%

 

 

1.9

%

 

 

4.2

%

 

 

3.0

%

 

 

0.4

%

 

 

(0.5

%)

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the six months ended June 30, 2024.

Equity Residential

Same Store Residential Net Effective Lease Pricing Statistics

For 77,054 Same Store Apartment Units

 

 

 

New Lease Change (1)

 

Renewal Rate Achieved (1)

 

Blended Rate (1)

Markets/Metro Areas

 

Q2 2024

 

Q1 2024

 

Q2 2024

 

Q1 2024

 

Q2 2024

 

Q1 2024

Southern California

 

 

(2.4

%)

 

 

(3.6

%)

 

 

4.5

%

 

 

4.4

%

 

 

1.5

%

 

 

0.5

%

Washington, D.C.

 

 

4.9

%

 

 

1.6

%

 

 

6.7

%

 

 

5.7

%

 

 

5.9

%

 

 

4.0

%

San Francisco

 

 

0.4

%

 

 

(1.1

%)

 

 

5.1

%

 

 

4.1

%

 

 

2.9

%

 

 

1.7

%

New York

 

 

3.5

%

 

 

(1.1

%)

 

 

4.4

%

 

 

4.1

%

 

 

4.0

%

 

 

2.2

%

Boston

 

 

0.3

%

 

 

(3.4

%)

 

 

5.0

%

 

 

5.2

%

 

 

3.0

%

 

 

1.0

%

Seattle

 

 

0.5

%

 

 

(1.2

%)

 

 

5.3

%

 

 

6.1

%

 

 

3.3

%

 

 

2.8

%

Subtotal – Established Markets

 

 

0.9

%

 

 

(1.8

%)

 

 

5.1

%

 

 

4.8

%

 

 

3.3

%

 

 

1.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denver

 

 

(4.6

%)

 

 

(6.3

%)

 

 

3.9

%

 

 

4.3

%

 

 

(0.4

%)

 

 

(2.0

%)

Other Expansion Markets

 

 

(12.5

%)

 

 

(8.8

%)

 

 

2.7

%

 

 

4.1

%

 

 

(6.2

%)

 

 

(3.8

%)

Subtotal – Expansion Markets

 

 

(9.0

%)

 

 

(7.7

%)

 

 

3.3

%

 

 

4.2

%

 

 

(3.5

%)

 

 

(2.9

%)

Total

 

 

0.2

%

 

 

(2.2

%)

 

 

5.0

%

 

 

4.7

%

 

 

2.9

%

 

 

1.6

%

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for definitions.

Equity Residential

Second Quarter 2024 vs. Second Quarter 2023

Total Same Store Operating Expenses Including 77,054 Same Store Apartment Units

(includes Residential and Non-Residential)

($ in thousands)

 

 

 

Q2 2024

 

Q2 2023

 

$

Change

 

%

Change

 

% of

Q2 2024

Operating

Expenses

Real estate taxes

 

$

93,565

 

 

$

90,629

 

 

$

2,936

 

 

 

3.2

%

 

 

41.7

%

On-site payroll

 

 

42,531

 

 

 

42,507

 

 

 

24

 

 

 

0.1

%

 

 

18.9

%

Utilities

 

 

32,340

 

 

 

31,537

 

 

 

803

 

 

 

2.5

%

 

 

14.4

%

Repairs and maintenance

 

 

31,556

 

 

 

31,194

 

 

 

362

 

 

 

1.2

%

 

 

14.1

%

Insurance

 

 

9,307

 

 

 

8,427

 

 

 

880

 

 

 

10.4

%

 

 

4.1

%

Leasing and advertising

 

 

2,691

 

 

 

2,535

 

 

 

156

 

 

 

6.2

%

 

 

1.2

%

Other on-site operating expenses

 

 

12,535

 

 

 

11,852

 

 

 

683

 

 

 

5.8

%

 

 

5.6

%

Total Same Store Operating Expenses (2)

 

$

224,525

 

 

$

218,681

 

 

$

5,844

 

 

 

2.7

%

 

 

100.0

%

 

June YTD 2024 vs. June YTD 2023

Total Same Store Operating Expenses Including 77,054 Same Store Apartment Units

(includes Residential and Non-Residential)

($ in thousands)

 

 

 

YTD 2024

 

YTD 2023

 

$

Change (1)

 

%

Change

 

% of

YTD 2024

Operating

Expenses

Real estate taxes

 

$

187,555

 

 

$

181,258

 

 

$

6,297

 

 

 

3.5

%

 

 

41.2

%

On-site payroll

 

 

85,454

 

 

 

85,116

 

 

 

338

 

 

 

0.4

%

 

 

18.8

%

Utilities

 

 

69,366

 

 

 

70,530

 

 

 

(1,164

)

 

 

(1.7

%)

 

 

15.2

%

Repairs and maintenance

 

 

61,242

 

 

 

61,555

 

 

 

(313

)

 

 

(0.5

%)

 

 

13.4

%

Insurance

 

 

18,614

 

 

 

16,853

 

 

 

1,761

 

 

 

10.4

%

 

 

4.1

%

Leasing and advertising

 

 

5,052

 

 

 

5,111

 

 

 

(59

)

 

 

(1.2

%)

 

 

1.1

%

Other on-site operating expenses

 

 

28,154

 

 

 

26,298

 

 

 

1,856

 

 

 

7.1

%

 

 

6.2

%

Total Same Store Operating Expenses (2)

 

$

455,437

 

 

$

446,721

 

 

$

8,716

 

 

 

2.0

%

 

 

100.0

%

 

(1)

The year-over-year changes were primarily driven by the following factors:

 

Real estate taxes – Increase due to escalation in rates and assessed values including an approximately one percentage point contribution to growth from 421-a tax abatement burnoffs in New York City. Once the burnoffs are completed, previously rent-restricted apartment units will transition to market.

 

On-site payroll – Modest increase due primarily to higher wages partially offset by the impact of various innovation initiatives.

 

Utilities – Decrease primarily driven by lower commodity prices for gas and electric.

 

Repairs and maintenance – Decrease primarily driven by lower resident Turnover compared to the same period of 2023 and a benefit from a relatively easy comparable period.

 

Insurance – Increase due to higher premiums on property insurance renewal due to conditions in the insurance market that while less difficult than recent years, remain challenging.

 

Other on-site operating expenses – Increase primarily driven by higher property-related legal expenses.

 

(2)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

Equity Residential

Debt Summary as of June 30, 2024

($ in thousands)

 

 

 

Debt

Balances (1)

 

% of Total

 

Weighted

Average

Rates (1)

 

Weighted

Average

Maturities

(years)

Secured

 

$

1,634,838

 

 

 

22.8

%

 

 

3.86

%

 

 

7.4

 

Unsecured

 

 

5,522,345

 

 

 

77.2

%

 

 

3.63

%

 

 

8.0

 

Total

 

$

7,157,183

 

 

 

100.0

%

 

 

3.69

%

 

 

7.9

 

Fixed Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Conventional

 

$

1,399,844

 

 

 

19.5

%

 

 

3.89

%

 

 

6.9

 

Unsecured – Public

 

 

5,351,461

 

 

 

74.8

%

 

 

3.52

%

 

 

8.3

 

Fixed Rate Debt

 

 

6,751,305

 

 

 

94.3

%

 

 

3.60

%

 

 

8.0

 

Floating Rate Debt:

 

 

 

 

 

 

 

 

 

 

 

 

Secured – Tax Exempt

 

 

234,994

 

 

 

3.3

%

 

 

3.69

%

 

 

10.1

 

Unsecured – Revolving Credit Facility

 

 

 

 

 

 

 

 

 

 

 

3.3

 

Unsecured – Commercial Paper Program (2)

 

 

170,884

 

 

 

2.4

%

 

 

5.59

%

 

 

 

Floating Rate Debt

 

 

405,878

 

 

 

5.7

%

 

 

4.75

%

 

 

6.0

 

Total

 

$

7,157,183

 

 

 

100.0

%

 

 

3.69

%

 

 

7.9

 

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

(2)

At June 30, 2024, the weighted average maturity of commercial paper outstanding was 5 days. The weighted average amount outstanding for the six months ended June 30, 2024 was approximately $300.1 million.

 

Note: The Company capitalized interest of approximately $6.9 million and $7.0 million during the six months ended June 30, 2024 and 2023, respectively. The Company capitalized interest of approximately $3.8 million and $3.6 million during the quarters ended June 30, 2024 and 2023, respectively.

Equity Residential

Debt Maturity Schedule as of June 30, 2024

($ in thousands)

 

Year

 

Fixed

Rate

 

Floating

Rate

 

Total

 

% of Total

 

Weighted

Average Coupons

on Fixed

Rate Debt (1)

 

Weighted

Average

Coupons on

Total Debt (1)

2024

 

$

 

 

$

177,200

 

(2)

$

177,200

 

 

 

2.5

%

 

 

 

 

 

5.48

%

2025

 

 

450,000

 

 

 

8,100

 

 

 

458,100

 

 

 

6.3

%

 

 

3.38

%

 

 

3.39

%

2026

 

 

592,025

 

 

 

9,000

 

 

 

601,025

 

 

 

8.3

%

 

 

3.58

%

 

 

3.59

%

2027

 

 

400,000

 

 

 

9,800

 

 

 

409,800

 

 

 

5.7

%

 

 

3.25

%

 

 

3.27

%

2028

 

 

900,000

 

 

 

10,700

 

 

 

910,700

 

 

 

12.6

%

 

 

3.79

%

 

 

3.79

%

2029

 

 

888,120

 

 

 

11,500

 

 

 

899,620

 

 

 

12.4

%

 

 

3.30

%

 

 

3.31

%

2030

 

 

1,148,462

 

 

 

12,700

 

 

 

1,161,162

 

 

 

16.1

%

 

 

2.53

%

 

 

2.55

%

2031

 

 

528,500

 

 

 

39,800

 

 

 

568,300

 

 

 

7.9

%

 

 

1.94

%

 

 

2.08

%

2032

 

 

 

 

 

28,000

 

 

 

28,000

 

 

 

0.4

%

 

 

 

 

 

4.20

%

2033

 

 

550,000

 

 

 

2,300

 

 

 

552,300

 

 

 

7.6

%

 

 

5.22

%

 

 

5.22

%

2034+

 

 

1,350,850

 

 

 

108,600

 

 

 

1,459,450

 

 

 

20.2

%

 

 

4.39

%

 

 

4.30

%

Subtotal

 

 

6,807,957

 

 

 

417,700

 

 

 

7,225,657

 

 

 

100.0

%

 

 

3.53

%

 

 

3.58

%

Deferred Financing Costs and Unamortized (Discount)

 

 

(56,652

)

 

 

(11,822

)

 

 

(68,474

)

 

N/A

 

 

N/A

 

 

N/A

 

Total

 

$

6,751,305

 

 

$

405,878

 

 

$

7,157,183

 

 

 

100.0

%

 

 

3.53

%

 

 

3.58

%

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

(2)

Includes $171.0 million in principal outstanding on the Company's Commercial Paper Program.

Equity Residential

Selected Unsecured Public Debt Covenants

 

 

 

June 30,

 

March 31,

 

 

2024

 

2024

Debt to Adjusted Total Assets (not to exceed 60%)

 

25.6%

 

25.8%

 

 

 

 

 

Secured Debt to Adjusted Total Assets (not to exceed 40%)

 

6.7%

 

6.7%

 

 

 

 

 

Consolidated Income Available for Debt Service to

 

Maximum Annual Service Charges

(must be at least 1.5 to 1)

 

6.68

 

6.41

 

 

 

 

 

Total Unencumbered Assets to Unsecured Debt

 

(must be at least 125%)

 

534.8%

 

528.1%

Note: These selected covenants represent the most restrictive financial covenants relating to ERP Operating Limited Partnership's ("ERPOP") outstanding public debt securities. Equity Residential is the general partner of ERPOP.

Selected Credit Ratios

 

 

 

June 30,

 

March 31,

 

 

2024

 

2024

Total debt to Normalized EBITDAre

 

3.96x

 

4.01x

 

 

 

 

 

Net debt to Normalized EBITDAre

 

3.92x

 

3.97x

 

 

 

 

 

Unencumbered NOI as a % of total NOI

 

89.6%

 

89.6%

Note: See Normalized EBITDAre Reconciliations for detail.

Equity Residential

Capital Structure as of June 30, 2024

(Amounts in thousands except for share/unit and per share amounts)

 

Secured Debt

 

 

 

 

 

 

 

$

1,634,838

 

 

 

22.8

%

 

 

 

Unsecured Debt

 

 

 

 

 

 

 

 

5,522,345

 

 

 

77.2

%

 

 

 

Total Debt

 

 

 

 

 

 

 

 

7,157,183

 

 

 

100.0

%

 

 

20.9

%

Common Shares (includes Restricted Shares)

 

 

379,086,882

 

 

 

97.0

%

 

 

 

 

 

 

 

 

 

Units (includes OP Units and Restricted Units)

 

 

11,663,842

 

 

 

3.0

%

 

 

 

 

 

 

 

 

 

Total Shares and Units

 

 

390,750,724

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

Common Share Price at June 30, 2024

 

$

69.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,094,655

 

 

 

99.9

%

 

 

 

Perpetual Preferred Equity (see below)

 

 

 

 

 

 

 

 

17,155

 

 

 

0.1

%

 

 

 

Total Equity

 

 

 

 

 

 

 

 

27,111,810

 

 

 

100.0

%

 

 

79.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Market Capitalization

 

 

 

 

 

 

 

$

34,268,993

 

 

 

 

 

 

100.0

%

 

Perpetual Preferred Equity as of June 30, 2024

(Amounts in thousands except for share and per share amounts)

 

Series

 

Call Date

 

Outstanding

Shares

 

 

Liquidation

Value

 

 

Annual

Dividend

Per Share

 

 

Annual

Dividend

Amount

 

Preferred Shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8.29% Series K

 

12/10/26

 

 

343,100

 

 

$

17,155

 

 

$

4.145

 

 

$

1,422

 

 

Equity Residential

Common Share and Unit

Weighted Average Amounts Outstanding

 

 

June YTD 2024

 

June YTD 2023

 

Q2 2024

 

Q2 2023

Weighted Average Amounts Outstanding for Net Income Purposes:

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares - basic

 

 

378,699,050

 

 

 

378,492,171

 

 

 

378,578,395

 

 

 

378,641,804

 

Shares issuable from assumed conversion/vesting of:

 

 

 

 

 

 

 

 

 

 

 

 

- OP Units

 

 

10,680,864

 

 

 

11,449,790

 

 

 

10,692,382

 

 

 

11,390,569

 

- long-term compensation shares/units

 

 

1,167,742

 

 

 

1,121,169

 

 

 

1,271,160

 

 

 

1,155,127

 

Total Common Shares and Units - diluted

 

 

390,547,656

 

 

 

391,063,130

 

 

 

390,541,937

 

 

 

391,187,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes:

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares - basic

 

 

378,699,050

 

 

 

378,492,171

 

 

 

378,578,395

 

 

 

378,641,804

 

OP Units - basic

 

 

10,680,864

 

 

 

11,449,790

 

 

 

10,692,382

 

 

 

11,390,569

 

Total Common Shares and OP Units - basic

 

 

389,379,914

 

 

 

389,941,961

 

 

 

389,270,777

 

 

 

390,032,373

 

Shares issuable from assumed conversion/vesting of:

 

 

 

 

 

 

 

 

 

 

 

 

- long-term compensation shares/units

 

 

1,167,742

 

 

 

1,121,169

 

 

 

1,271,160

 

 

 

1,155,127

 

Total Common Shares and Units - diluted

 

 

390,547,656

 

 

 

391,063,130

 

 

 

390,541,937

 

 

 

391,187,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period Ending Amounts Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares (includes Restricted Shares)

 

 

379,086,882

 

 

 

379,032,722

 

 

 

 

 

 

 

Units (includes OP Units and Restricted Units)

 

 

11,663,842

 

 

 

12,415,452

 

 

 

 

 

 

 

Total Shares and Units

 

 

390,750,724

 

 

 

391,448,174

 

 

 

 

 

 

 

Equity Residential

Development and Lease-Up Projects as of June 30, 2024

(Amounts in thousands except for project and apartment unit amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Estimated/Actual

 

 

Projects

 

Location

 

Ownership

Percentage

 

No. of

Apartment

Units

 

 

Total

Budgeted

Capital

Cost

 

 

Total

Book

Value

to Date

 

 

Total

Debt (1)

 

 

Percentage

Completed

 

Start

Date

 

Initial

Occupancy

 

Completion

Date

 

Stabilization

Date

 

Percentage

Leased /

Occupied

CONSOLIDATED:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Under Development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Laguna Clara II

 

Santa Clara, CA

 

100%

 

 

225

 

 

$

152,621

 

 

$

107,556

 

 

$

 

 

75%

 

Q2 2022

 

Q4 2024

 

Q1 2025

 

Q4 2025

 

– / –

The Basin

 

Wakefield, MA

 

95%

 

 

440

 

 

 

232,172

 

 

 

80,727

 

 

 

 

 

18%

 

Q1 2024

 

Q4 2025

 

Q3 2026

 

Q2 2027

 

– / –

Projects Under Development - Consolidated

 

 

 

 

665

 

 

 

384,793

 

 

 

188,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Completed and Stabilized During the Quarter:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reverb (fka 9th and W) (2)

 

Washington, D.C.

 

92%

 

 

312

 

 

 

106,027

 

 

 

104,833

 

 

 

 

 

100%

 

Q3 2021

 

Q2 2023

 

Q2 2023

 

Q2 2024

 

97% / 93%

Projects Completed and Stabilized During the Quarter - Consolidated

 

 

 

 

312

 

 

 

106,027

 

 

 

104,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNCONSOLIDATED:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Under Development:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alexan Harrison

 

Harrison, NY

 

62%

 

 

450

 

 

 

200,664

 

 

 

191,592

 

 

 

97,980

 

 

97%

 

Q3 2021

 

Q1 2024

 

Q4 2024

 

Q2 2026

 

40% / 33%

Solana Beeler Park

 

Denver, CO

 

90%

 

 

270

 

 

 

85,206

 

 

 

72,278

 

 

 

37,309

 

 

86%

 

Q4 2021

 

Q4 2024

 

Q2 2025

 

Q4 2025

 

3% / –

Remy (Toll)

 

Frisco, TX

 

75%

 

 

357

 

 

 

98,937

 

 

 

90,047

 

 

 

45,967

 

 

94%

 

Q1 2022

 

Q2 2024

 

Q4 2024

 

Q3 2025

 

35% / 27%

Sadie (fka Settler) (Toll)

 

Fort Worth, TX

 

75%

 

 

362

 

 

 

82,775

 

 

 

69,981

 

 

 

29,617

 

 

91%

 

Q2 2022

 

Q2 2024

 

Q4 2024

 

Q3 2025

 

26% / 12%

Lyle (Toll) (2)

 

Dallas, TX

 

75%

 

 

334

 

 

 

86,332

 

 

 

73,862

 

 

 

38,666

 

 

92%

 

Q3 2022

 

Q1 2024

 

Q4 2024

 

Q1 2026

 

38% / 23%

Projects Under Development - Unconsolidated

 

 

 

 

1,773

 

 

 

553,914

 

 

 

497,760

 

 

 

249,539

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projects Completed Not Stabilized:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alloy Sunnyside

 

Denver, CO

 

80%

 

 

209

 

 

 

70,004

 

 

 

68,602

 

 

 

32,104

 

 

99%

 

Q3 2021

 

Q2 2024

 

Q2 2024

 

Q3 2025

 

7% / 2%

Projects Completed Not Stabilized - Unconsolidated

 

 

 

 

209

 

 

 

70,004

 

 

 

68,602

 

 

 

32,104

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Development Projects - Consolidated

 

 

 

 

 

 

977

 

 

 

490,820

 

 

 

293,116

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Development Projects - Unconsolidated

 

 

 

 

 

 

1,982

 

 

 

623,918

 

 

 

566,362

 

 

 

281,643

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Development Projects

 

 

 

 

 

 

2,959

 

 

$

1,114,738

 

 

$

859,478

 

 

$

281,643

 

 

 

 

 

 

 

 

 

 

 

 

 

NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS

Total Budgeted

Capital Cost

 

 

Q2 2024

NOI

 

Projects Under Development - Consolidated

$

384,793

 

 

$

 

Projects Completed and Stabilized During the Quarter - Consolidated

 

106,027

 

 

 

1,331

 

Projects Under Development - Unconsolidated

 

553,914

 

 

 

293

 

Projects Completed Not Stabilized - Unconsolidated

 

70,004

 

 

 

(71

)

 

$

1,114,738

 

 

$

1,553

 

(1)

All unconsolidated projects are being partially funded with project-specific construction loans. None of these loans are recourse to the Company.

(2)

The land parcels under these projects are subject to long-term ground leases.

Equity Residential

Capital Expenditures to Real Estate

For the Six Months Ended June 30, 2024

(Amounts in thousands except for apartment unit and per apartment unit amounts)

 

 

Same Store

Properties

 

 

Non-Same Store

Properties/Other

 

 

Total Consolidated

Properties

 

 

Same Store Avg.

Per Apartment Unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Consolidated Apartment Units

 

 

77,054

 

 

 

2,475

 

 

 

79,529

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Improvements

 

$

62,969

 

 

$

5,446

 

(2)

$

68,415

 

 

$

817

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renovation Expenditures

 

 

47,374

 

(1)

 

8,022

 

(2)

 

55,396

 

 

 

615

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Replacements

 

 

29,344

 

 

 

149

 

 

 

29,493

 

 

 

381

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures to Real Estate (3)

 

 

139,687

 

 

 

13,617

 

 

 

153,304

 

 

 

1,813

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: NOI-Enhancing Expenditures (3)

 

 

(61,815

)

(4)

 

(8,033

)

 

 

(69,848

)

 

 

(802

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring Capital Expenditures to Real Estate (3)

 

$

77,872

 

 

$

5,584

 

 

$

83,456

 

 

$

1,011

 

(1)

Renovation Expenditures on 1,523 same store apartment units for the six months ended June 30, 2024 approximated $31,100 per apartment unit renovated.

(2)

Includes expenditures for two properties that have been removed from same store while undergoing major renovations requiring a significant number of apartment units to be vacated to accommodate the extensive planned improvements. The renovation at one property was substantially completed in the second quarter of 2024, while the renovation of the other is ongoing and expected to continue into 2026.

(3)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

(4)

The $61.8 million of NOI-Enhancing Expenditures for Same Store Properties noted above consist of the $47.4 million of Renovation Expenditures for Same Store Properties noted above with the remainder concentrated in sustainability and property-level technology spend.

Equity Residential

Normalized EBITDAre Reconciliations

(Amounts in thousands)

 

 

Trailing Twelve Months

 

2024

 

2023

 

 

June 30, 2024

 

March 31, 2024

 

Q2

 

Q1

 

Q4

 

Q3

 

Q2

Net income

 

$

992,142

 

 

$

953,449

 

 

$

183,555

 

 

$

305,032

 

 

$

322,269

 

 

$

181,286

 

 

$

144,862

 

Interest expense incurred, net

 

 

270,605

 

 

 

270,367

 

 

 

65,828

 

 

 

67,212

 

 

 

68,674

 

 

 

68,891

 

 

 

65,590

 

Amortization of deferred financing costs

 

 

8,781

 

 

 

8,880

 

 

 

1,918

 

 

 

1,918

 

 

 

1,918

 

 

 

3,027

 

 

 

2,017

 

Amortization of above/below market lease intangibles

 

 

4,464

 

 

 

4,464

 

 

 

1,116

 

 

 

1,116

 

 

 

1,116

 

 

 

1,116

 

 

 

1,116

 

Depreciation

 

 

901,617

 

 

 

898,574

 

 

 

224,398

 

 

 

225,695

 

 

 

226,788

 

 

 

224,736

 

 

 

221,355

 

Income and other tax expense (benefit)

 

 

1,149

 

 

 

1,154

 

 

 

331

 

 

 

304

 

 

 

256

 

 

 

258

 

 

 

336

 

EBITDA

 

 

2,178,758

 

 

 

2,136,888

 

 

 

477,146

 

 

 

601,277

 

 

 

621,021

 

 

 

479,314

 

 

 

435,276

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (gain) loss on sales of real estate properties

 

 

(410,411

)

 

 

(370,515

)

 

 

(39,809

)

 

 

(188,185

)

 

 

(155,505

)

 

 

(26,912

)

 

 

87

 

EBITDAre

 

 

1,768,347

 

 

 

1,766,373

 

 

 

437,337

 

 

 

413,092

 

 

 

465,516

 

 

 

452,402

 

 

 

435,363

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs (other expenses)

 

 

3,023

 

 

 

2,863

 

 

 

821

 

 

 

548

 

 

 

908

 

 

 

746

 

 

 

661

 

(Income) loss from investments in unconsolidated entities - operations

 

 

6,145

 

 

 

5,694

 

 

 

1,674

 

 

 

1,698

 

 

 

1,531

 

 

 

1,242

 

 

 

1,223

 

Realized (gain) loss on investment securities (interest and other income)

 

 

(275

)

 

 

(1,591

)

 

 

1,316

 

 

 

 

 

 

7

 

 

 

(1,598

)

 

 

 

Unrealized (gain) loss on investment securities (interest and other income)

 

 

(19,211

)

 

 

(20,527

)

 

 

1,316

 

 

 

(7,061

)

 

 

(9,005

)

 

 

(4,461

)

 

 

 

Insurance/litigation settlement or reserve income (interest and other income)

 

 

(1,621

)

 

 

(360

)

 

 

(1,454

)

 

 

(105

)

 

 

 

 

 

(62

)

 

 

(193

)

Insurance/litigation/environmental settlement or reserve expense (other expenses)

 

 

48,667

 

 

 

42,789

 

 

 

9,391

 

 

 

30,478

 

 

 

5,694

 

 

 

3,104

 

 

 

3,513

 

Advocacy contributions (other expenses)

 

 

4,514

 

 

 

2,276

 

 

 

2,558

 

 

 

141

 

 

 

1,665

 

 

 

150

 

 

 

320

 

Data transformation project (other expenses)

 

 

295

 

 

 

1,700

 

 

 

 

 

 

 

 

 

 

 

 

295

 

 

 

1,405

 

Other

 

 

(936

)

 

 

(518

)

 

 

(412

)

 

 

77

 

 

 

(602

)

 

 

1

 

 

 

6

 

Normalized EBITDAre

 

$

1,808,948

 

 

$

1,798,699

 

 

$

452,547

 

 

$

438,868

 

 

$

465,714

 

 

$

451,819

 

 

$

442,298

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Items:

 

June 30, 2024

 

March 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total debt

 

$

7,157,183

 

 

$

7,209,729

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

(38,298

)

 

 

(44,535

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage principal reserves/sinking funds

 

 

(33,266

)

 

 

(31,203

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net debt

 

$

7,085,619

 

 

$

7,133,991

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: EBITDA, EBITDAre and Normalized EBITDAre do not include any adjustments for the Company’s share of partially owned unconsolidated entities or the minority partner’s share of partially owned consolidated entities due to the immaterial size of the Company’s partially owned portfolio.

Equity Residential

Adjustments from FFO to Normalized FFO

(Amounts in thousands)

 

 

Six Months Ended June 30,

 

Quarter Ended June 30,

 

 

2024

 

2023

 

Variance

 

2024

 

2023

 

Variance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment – non-operating real estate assets

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs (other expenses)

 

 

1,369

 

 

 

1,993

 

 

 

(624

)

 

 

821

 

 

 

661

 

 

 

160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of unamortized deferred financing costs (interest expense)

 

 

 

 

 

47

 

 

 

(47

)

 

 

 

 

 

47

 

 

 

(47

)

Premium on redemption of Preferred Shares

 

 

1,444

 

 

 

 

 

 

1,444

 

 

 

 

 

 

 

 

 

 

Debt extinguishment and preferred share redemption (gains) losses

 

 

1,444

 

 

 

47

 

 

 

1,397

 

 

 

 

 

 

47

 

 

 

(47

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Income) loss from investments in unconsolidated entities ─ non-operating assets

 

 

1,213

 

 

 

944

 

 

 

269

 

 

 

258

 

 

 

317

 

 

 

(59

)

Realized (gain) loss on investment securities (interest and other income)

 

 

1,316

 

 

 

87

 

 

 

1,229

 

 

 

1,316

 

 

 

 

 

 

1,316

 

Unrealized (gain) loss on investment securities (interest and other income)

 

 

(5,745

)

 

 

 

 

 

(5,745

)

 

 

1,316

 

 

 

 

 

 

1,316

 

Non-operating asset (gains) losses

 

 

(3,216

)

 

 

1,031

 

 

 

(4,247

)

 

 

2,890

 

 

 

317

 

 

 

2,573

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance/litigation settlement or reserve income (interest and other income)

 

 

(1,559

)

 

 

(993

)

 

 

(566

)

 

 

(1,454

)

 

 

(193

)

 

 

(1,261

)

Insurance/litigation/environmental settlement or reserve expense (other expenses) (1)

 

 

39,869

 

 

 

8,512

 

 

 

31,357

 

 

 

9,391

 

 

 

3,513

 

 

 

5,878

 

Advocacy contributions (other expenses)

 

 

2,699

 

 

 

327

 

 

 

2,372

 

 

 

2,558

 

 

 

320

 

 

 

2,238

 

Data transformation project (other expenses)

 

 

 

 

 

3,485

 

 

 

(3,485

)

 

 

 

 

 

1,405

 

 

 

(1,405

)

Other

 

 

(335

)

 

 

12

 

 

 

(347

)

 

 

(412

)

 

 

6

 

 

 

(418

)

Other miscellaneous items

 

 

40,674

 

 

 

11,343

 

 

 

29,331

 

 

 

10,083

 

 

 

5,051

 

 

 

5,032

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments from FFO to Normalized FFO

 

$

40,271

 

 

$

14,414

 

 

$

25,857

 

 

$

13,794

 

 

$

6,076

 

 

$

7,718

 

(1)

Insurance/litigation/environmental settlement or reserve expense for the second quarter of 2024 primarily represents reserve adjustments related to a commercial dispute and construction defect expenses, while the expense for the six months ended June 30, 2024 primarily relates to a reserve increased in the first quarter of 2024 regarding litigation over late fees charged by the Company.

Note: See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of EPS to FFO per share and Normalized FFO per share.

Equity Residential

Normalized FFO Guidance and Assumptions

The guidance/projections provided below are based on current expectations and are forward-looking. All guidance is given on a Normalized FFO basis. Therefore, certain items excluded from Normalized FFO, such as debt extinguishment costs/prepayment penalties and the write-off of pursuit costs, are not included in the estimates provided on this page. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of EPS to FFO per share and Normalized FFO per share.

 

 

Q3 2024

 

Revised Full Year 2024

 

Previous Full Year 2024

 

 

 

 

 

 

 

2024 Normalized FFO Guidance (per share diluted)

 

 

 

 

 

 

 

 

 

 

 

 

 

Expected Normalized FFO Per Share

 

$0.96 to $1.00

 

$3.86 to $3.92

 

$3.80 to $3.90

 

 

 

 

 

 

 

2024 Same Store Assumptions (includes Residential and Non-Residential)

 

 

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

 

 

96.2%

 

95.9%

Revenue change

 

 

 

2.9% to 3.5%

 

2.0% to 3.0%

Expense change

 

 

 

2.5% to 3.5%

 

3.5% to 4.5%

NOI change (1)

 

 

 

3.0% to 3.5%

 

1.0% to 2.6%

 

 

 

 

 

 

 

2024 Transaction Assumptions

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated rental acquisitions

 

 

 

$1.0B

 

$1.0B

Consolidated rental dispositions

 

 

 

$1.0B

 

$1.0B

Transaction Accretion (Dilution)

 

 

 

(25 basis points)

 

(25 basis points)

 

 

 

 

 

 

 

2024 Debt Assumptions

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average debt outstanding

 

 

 

$7.30B to $7.50B

 

$7.27B to $7.47B

Interest expense, net (on a Normalized FFO basis)

 

 

 

$267.3M to $273.3M

 

$268.0M to $274.0M

Capitalized interest

 

 

 

$12.5M to $15.5M

 

$9.7M to $13.7M

 

 

 

 

 

 

 

2024 Capital Expenditures to Real Estate Assumptions for Same Store Properties (2)

 

 

 

 

 

 

 

 

 

Capital Expenditures to Real Estate for Same Store Properties

 

 

 

$295.0M

 

$295.0M

Capital Expenditures to Real Estate per Same Store Apartment Unit

 

$3,800

 

$3,800

 

 

 

 

 

 

 

2024 Other Guidance Assumptions

 

 

 

 

 

 

 

 

 

 

 

 

 

Property management expense

 

 

 

$128.5M to $131.5M

 

$124.0M to $126.0M

General and administrative expense

 

 

 

$59.5M to $63.5M

 

$57.5M to $61.5M

Debt offerings

 

 

 

No amounts budgeted

 

No amounts budgeted

Weighted average Common Shares and Units - Diluted

 

390.7M

 

391.1M

(1)

Approximately 20 basis point change in NOI percentage = $0.01 per share change in EPS/FFO per share/Normalized FFO per share.

(2)

During 2024, the Company expects that approximately 40% of its Capital Expenditures to Real Estate for Same Store Properties will be NOI-Enhancing (primarily renovations, sustainability and property-level technology spend). During 2024, the Company expects to spend approximately $99.2 million for apartment unit Renovation Expenditures on approximately 3,100 same store apartment units at an average cost of approximately $32,000 per apartment unit renovated with the remainder of the NOI-Enhancing spend consisting of sustainability and property-level technology expenditures.

Equity Residential

Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms

(Amounts in thousands except per share and per apartment unit data)

(All per share data is diluted)

This Earnings Release and Supplemental Financial Information includes certain non-GAAP financial measures and other terms that management believes are helpful in understanding our business. The definitions and calculations of these non-GAAP financial measures and other terms may differ from the definitions and methodologies used by other real estate investment trusts (“REIT”) and, accordingly, may not be comparable. These non-GAAP financial measures should not be considered as an alternative to net earnings or any other measurement of performance computed in accordance with accounting principles generally accepted in the United States (“GAAP”) or as an alternative to cash flows from specific operating, investing or financing activities. Furthermore, these non-GAAP financial measures are not intended to be a measure of cash flow or liquidity.

Acquisition Capitalization Rate or Cap Rate – NOI that the Company anticipates receiving in the next 12 months (or the year two or three stabilized NOI for properties that are in lease-up at acquisition) less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross purchase price of the asset. The weighted average Acquisition Cap Rate for acquired properties is weighted based on the projected NOI streams and the relative purchase price for each respective property.

Average Rental Rate – Total Residential rental revenues reflected on a straight-line basis in accordance with GAAP divided by the weighted average occupied apartment units for the reporting period presented.

Bad Debt, Net – Change in rental income due to bad debt write-offs and reserves, net of amounts collected on previously written-off or reserved accounts.

Blended Rate – The weighted average of New Lease Change and Renewal Rate Achieved.

Capital Expenditures to Real Estate:

Building Improvements Includes roof replacement, paving, building mechanical equipment systems, exterior siding and painting, major landscaping, furniture, fixtures and equipment for amenities and common areas, vehicles and office and maintenance equipment.

NOI-Enhancing – Primarily includes Renovation Expenditures as well as sustainability and property-level technology expenditures that are intended to increase revenues or decrease expenses.

Recurring – Capital expenditures necessary to help preserve the value of and maintain the functionality at our apartment properties.

Renovation Expenditures – Apartment unit renovation costs (primarily kitchens and baths) designed to reposition these units for higher rental levels in their respective markets.

Replacements – Includes appliances, mechanical equipment, fixtures and flooring (including hardwood and carpeting).

Debt Balances:

Commercial Paper Program The Company may borrow up to a maximum of $1.0 billion under its Commercial Paper Program subject to market conditions. The notes bear interest at various floating rates.

Revolving Credit Facility The Company’s $2.5 billion unsecured revolving credit facility matures October 26, 2027. The interest rate on advances under the facility will generally be SOFR plus a spread (currently 0.715%), or based on bids received from the lending group, and an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating. In addition, the Company limits its utilization of the facility in order to maintain liquidity to support its $1.0 billion Commercial Paper Program along with certain other obligations. The following table presents the availability on the Company’s unsecured revolving credit facility:

 

 

June 30, 2024

 

Unsecured revolving credit facility commitment

 

$

2,500,000

 

Commercial paper balance outstanding

 

 

(171,000

)

Unsecured revolving credit facility balance outstanding

 

 

 

Other restricted amounts

 

 

(3,438

)

Unsecured revolving credit facility availability

 

$

2,325,562

 

Debt Covenant Compliance – Our unsecured debt includes certain financial and operating covenants including, among other things, maintenance of certain financial ratios. These provisions are contained in the indentures applicable to each notes payable or the credit agreement for our line of credit. The Debt Covenant Compliance ratios that are provided show the Company's compliance with certain covenants governing our public unsecured debt. These covenants generally reflect our most restrictive financial covenants. The Company was in compliance with its unsecured debt covenants for all periods presented.

Development Yield – NOI that the Company anticipates receiving in the next 12 months following stabilization less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $50-$150 per apartment unit depending on the type of asset) divided by the Total Budgeted Capital Cost of the asset. The weighted average Development Yield for development properties is weighted based on the projected NOI streams and the relative Total Budgeted Capital Cost for each respective property.

Disposition Yield – NOI that the Company anticipates giving up in the next 12 months less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $150-$450 per apartment unit depending on the age and condition of the asset) divided by the gross sales price of the asset. The weighted average Disposition Yield for sold properties is weighted based on the projected NOI streams and the relative sales price for each respective property.

Earnings Per Share ("EPS") Net income per share calculated in accordance with GAAP. Expected EPS is calculated on a basis consistent with actual EPS. Due to the uncertain timing and extent of property dispositions and the resulting gains/losses on sales, actual EPS could differ materially from expected EPS.

EBITDA for Real Estate and Normalized EBITDA for Real Estate:

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) The National Association of Real Estate Investment Trusts (“Nareit”) defines EBITDAre (September 2017 White Paper) as net income (computed in accordance with GAAP) before interest expense, income taxes, depreciation and amortization expense, and further adjusted for gains and losses from sales of depreciated operating properties, impairment write-downs of depreciated operating properties, impairment write-downs of investments in unconsolidated entities caused by a decrease in value of depreciated operating properties within the joint venture and adjustments to reflect the Company’s share of EBITDAre of investments in unconsolidated entities.

The Company believes that EBITDAre is useful to investors, creditors and rating agencies as a supplemental measure of the Company’s ability to incur and service debt because it is a recognized measure of performance by the real estate industry, and by excluding gains or losses related to sales or impairment of depreciated operating properties, EBITDAre can help compare the Company’s credit strength between periods or as compared to different companies.

Normalized Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“Normalized EBITDAre”) – Represents net income (computed in accordance with GAAP) before interest expense, income taxes, depreciation and amortization expense, and further adjusted for non-comparable items. Normalized EBITDAre, total debt to Normalized EBITDAre and net debt to Normalized EBITDAre are important metrics in evaluating the credit strength of the Company and its ability to service its debt obligations. The Company believes that Normalized EBITDAre, total debt to Normalized EBITDAre, and net debt to Normalized EBITDAre are useful to investors, creditors and rating agencies because they allow investors to compare the Company’s credit strength to prior reporting periods and to other companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual credit quality.

Economic Gain (Loss) – Economic Gain (Loss) is calculated as the net gain (loss) on sales of real estate properties in accordance with GAAP, excluding accumulated depreciation. The Company generally considers Economic Gain (Loss) to be an appropriate supplemental measure to net gain (loss) on sales of real estate properties in accordance with GAAP because it is one indication of the gross value created by the Company's acquisition, development, renovation, management and ultimate sale of a property and because it helps investors to understand the relationship between the cash proceeds from a sale and the cash invested in the sold property. The following table presents a reconciliation of net gain (loss) on sales of real estate properties in accordance with GAAP to Economic Gain (Loss):

 

 

Six Months Ended June 30, 2024

 

 

Quarter Ended June 30, 2024

 

Net Gain (Loss) on Sales of Real Estate Properties

$

227,994

 

 

$

39,809

 

Accumulated Depreciation Gain

 

 

(96,675

)

 

 

(38,655

)

Economic Gain (Loss)

 

$

131,319

 

 

$

1,154

 

Established Markets Includes Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California (Los Angeles, Orange County and San Diego).

Expansion Markets – Includes Denver, Atlanta, Dallas/Ft. Worth and Austin.

FFO and Normalized FFO:

Funds From Operations (“FFO”) Nareit defines FFO (December 2018 White Paper) as net income (computed in accordance with GAAP), excluding gains or losses from sales and impairment write-downs of depreciable real estate and land when connected to the main business of a REIT, impairment write-downs of investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and depreciation and amortization related to real estate. Adjustments for partially owned consolidated and unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. Expected FFO per share is calculated on a basis consistent with actual FFO per share and is considered an appropriate supplemental measure of expected operating performance when compared to expected EPS.

The Company believes that FFO and FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses from sales and impairment write-downs of depreciable real estate and excluding depreciation related to real estate (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies.

Normalized Funds From Operations ("Normalized FFO" or "NFFO") – Normalized FFO begins with FFO and excludes:

  • the impact of any expenses relating to non-operating real estate asset impairment;
  • pursuit cost write-offs;
  • gains and losses from early debt extinguishment and preferred share redemptions;
  • gains and losses from non-operating assets; and
  • other miscellaneous items.

Expected Normalized FFO per share is calculated on a basis consistent with actual Normalized FFO per share and is considered an appropriate supplemental measure of expected operating performance when compared to expected EPS.

The Company believes that Normalized FFO and Normalized FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the Company's operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company's actual operating results.

FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units should not be exclusively considered as alternatives to net income, net income available to Common Shares or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company's calculation of FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.

FFO available to Common Shares and Units and Normalized FFO available to Common Shares and Units are calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with GAAP. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the "Noncontrolling Interests – Operating Partnership". Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis.

The following table presents reconciliations of EPS to FFO per share and Normalized FFO per share for Consolidated Statements of Funds From Operations and Normalized Funds From Operations.

 

 

Actual June

 

 

Actual June

 

 

Actual

 

 

Actual

 

 

Expected

 

 

Expected

 

 

 

YTD 2024

 

 

YTD 2023

 

 

Q2 2024

 

 

Q2 2023

 

 

Q3 2024

 

 

2024

 

 

 

Per Share

 

 

Per Share

 

 

Per Share

 

 

Per Share

 

 

Per Share

 

 

Per Share

 

EPS – Diluted

 

$

1.24

 

 

$

0.92

 

 

$

0.47

 

 

$

0.37

 

 

$0.49 to $0.53

 

 

$3.04 to $3.10

 

Depreciation expense

 

 

1.15

 

 

 

1.11

 

 

 

0.57

 

 

 

0.56

 

 

 

0.57

 

 

 

2.29

 

Net (gain) loss on sales

 

 

(0.59

)

 

 

(0.25

)

 

 

(0.10

)

 

 

 

 

 

(0.12

)

 

 

(1.61

)

Impairment – operating real estate assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO per share – Diluted

 

 

1.80

 

 

 

1.78

 

 

 

0.94

 

 

 

0.93

 

 

0.94 to 0.98

 

 

3.72 to 3.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment – non-operating real estate

 

assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs

 

 

 

 

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

0.01

 

Debt extinguishment and preferred

 

share redemption (gains) losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.01

 

Non-operating asset (gains) losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.01

)

Other miscellaneous items

 

 

0.11

 

 

 

0.03

 

 

 

0.03

 

 

 

0.01

 

 

 

0.02

 

 

 

0.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO per share – Diluted

 

$

1.91

 

 

$

1.82

 

 

$

0.97

 

 

$

0.94

 

 

$0.96 to $1.00

 

 

$3.86 to $3.92

 

(1)

See Adjustments from FFO to Normalized FFO for additional detail.

Lease-Up NOI – Represents NOI for development properties: (i) in various stages of lease-up; and (ii) where lease-up has been completed but the properties were not stabilized (defined as having achieved 90% occupancy for three consecutive months) for all of the current and comparable periods presented.

Leasing Concessions – Reflects upfront discounts on both new move-in and renewal leases on a straight-line basis.

Net Operating Income (“NOI”) – NOI is the Company’s primary financial measure for evaluating each of its apartment properties. NOI is defined as rental income less direct property operating expenses (including real estate taxes and insurance). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company's apartment properties. NOI does not include an allocation of property management expenses either in the current or comparable periods. Rental income for all leases and operating expense for ground leases (for both same store and non-same store properties) are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.

The following tables present reconciliations of net income per the consolidated statements of operations to NOI, along with rental income, operating expenses and NOI per the consolidated statements of operations allocated between same store and non-same store/other results and further allocated between Residential same store and Non-Residential same store results (see Same Store Results):

 

 

Six Months Ended June 30,

 

Quarter Ended June 30,

 

 

2024

 

2023

 

2024

 

2023

Net income

 

$

488,587

 

 

$

364,933

 

 

$

183,555

 

 

$

144,862

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Property management

 

 

68,969

 

 

 

62,145

 

 

 

33,511

 

 

 

30,679

 

General and administrative

 

 

34,351

 

 

 

35,041

 

 

 

18,631

 

 

 

18,876

 

Depreciation

 

 

450,093

 

 

 

437,185

 

 

 

224,398

 

 

 

221,355

 

Net (gain) loss on sales of real estate

 

properties

 

 

(227,994

)

 

 

(100,122

)

 

 

(39,809

)

 

 

87

 

Interest and other income

 

 

(10,657

)

 

 

(3,669

)

 

 

(1,328

)

 

 

(2,131

)

Other expenses

 

 

45,123

 

 

 

15,559

 

 

 

13,385

 

 

 

6,564

 

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

Expense incurred, net

 

 

133,040

 

 

 

131,991

 

 

 

65,828

 

 

 

65,590

 

Amortization of deferred financing costs

 

 

3,836

 

 

 

3,996

 

 

 

1,918

 

 

 

2,017

 

Income and other tax expense (benefit)

 

635

 

 

 

634

 

 

 

331

 

 

 

336

 

(Income) loss from investments in unconsolidated

 

entities

 

3,372

 

 

 

2,605

 

 

 

1,674

 

 

 

1,223

 

Total NOI

 

$

989,355

 

 

$

950,298

 

 

$

502,094

 

 

$

489,458

 

 

 

Six Months Ended June 30,

 

Quarter Ended June 30,

Rental income:

 

2024

 

2023

 

2024

 

2023

Residential same store

 

$

1,376,668

 

 

$

1,330,997

 

 

$

691,798

 

 

$

671,601

 

Non-Residential same store

 

 

55,897

 

 

 

52,860

 

 

 

26,371

 

 

 

26,183

 

Total same store

 

 

1,432,565

 

 

 

1,383,857

 

 

 

718,169

 

 

 

697,784

 

Non-same store/other

 

 

32,416

 

 

 

38,540

 

 

 

15,994

 

 

 

19,525

 

Total rental income

 

 

1,464,981

 

 

 

1,422,397

 

 

 

734,163

 

 

 

717,309

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Residential same store

 

 

440,432

 

 

 

432,363

 

 

 

217,006

 

 

 

211,436

 

Non-Residential same store

 

 

15,005

 

 

 

14,358

 

 

 

7,519

 

 

 

7,245

 

Total same store

 

 

455,437

 

 

 

446,721

 

 

 

224,525

 

 

 

218,681

 

Non-same store/other

 

 

20,189

 

 

 

25,378

 

 

 

7,544

 

 

 

9,170

 

Total operating expenses

 

 

475,626

 

 

 

472,099

 

 

 

232,069

 

 

 

227,851

 

NOI:

 

 

 

 

 

 

 

 

 

 

 

 

Residential same store

 

 

936,236

 

 

 

898,634

 

 

 

474,792

 

 

 

460,165

 

Non-Residential same store

 

 

40,892

 

 

 

38,502

 

 

 

18,852

 

 

 

18,938

 

Total same store

 

 

977,128

 

 

 

937,136

 

 

 

493,644

 

 

 

479,103

 

Non-same store/other

 

 

12,227

 

 

 

13,162

 

 

 

8,450

 

 

 

10,355

 

Total NOI

 

$

989,355

 

 

$

950,298

 

 

$

502,094

 

 

$

489,458

 

New Lease Change The net effective change in rent (inclusive of Leasing Concessions) for a lease with a new or transferring resident compared to the rent for the prior lease of the identical apartment unit, regardless of lease term.

Non-Residential – Consists of revenues and expenses from retail and public parking garage operations.

Non-Same Store Properties – For annual comparisons, primarily includes all properties acquired during 2023 and 2024, plus any properties in lease-up and not stabilized as of January 1, 2023. Unless otherwise noted, includes both Residential and Non-Residential operations for these properties.

Percentage of Residents Renewing – Leases renewed expressed as a percentage of total renewal offers extended during the reporting period.

Physical Occupancy – The weighted average occupied apartment units for the reporting period divided by the average of total apartment units available for rent for the reporting period.

Pricing Trend – Weighted average of 12-month base rent including amenity amount less Leasing Concessions on 12-month signed leases for the reporting period.

Renewal Rate Achieved The net effective change in rent (inclusive of Leasing Concessions) for a new lease on an apartment unit where the lease has been renewed as compared to the rent for the prior lease of the identical apartment unit, regardless of lease term.

Residential – Consists of multifamily apartment revenues and expenses.

Same Store Operating Expenses:

Insurance Includes third-party insurance premiums, broker fees and other insurance-related procurement fees along with an allocation of estimated uninsured losses.

On-site Payroll Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff.

Other On-site Operating Expenses Includes ground lease costs and administrative costs such as office supplies, telephone and data charges and association and business licensing fees.

Repairs and Maintenance Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair and maintenance costs.

Utilities Represents gross expenses prior to any recoveries under the Resident Utility Billing System (“RUBS”). Recoveries are reflected in rental income.

Same Store Properties – For annual comparisons, primarily includes all properties acquired or completed that are stabilized prior to January 1, 2023, less properties subsequently sold. Properties are included in Same Store when they are stabilized for all of the current and comparable periods presented. Unless otherwise noted, includes both Residential and Non-Residential operations for these properties.

Same Store Residential Revenues Revenues from our Residential Same Store Properties only presented on a GAAP basis which reflects the impact of Leasing Concessions on a straight-line basis.

Same Store Residential Revenues with Leasing Concessions on a cash basis is presented in Same Store Results and is considered by the Company to be a supplemental measure to Same Store Residential Revenues in conformity with GAAP to help investors evaluate the impact of both current and historical Leasing Concessions on GAAP-based Same Store Residential Revenues and to more readily enable comparisons to revenue as reported by other companies. Same Store Residential Revenues with Leasing Concessions on a cash basis reflects the impact of Leasing Concessions used in the period and allows an investor to understand the historical trend in cash Leasing Concessions.

% of Stabilized Budgeted NOI – Represents original budgeted 2024 NOI for stabilized properties and projected annual NOI at stabilization (defined as having achieved 90% occupancy for three consecutive months) for properties that are in lease-up.

Total Budgeted Capital Cost – Estimated remaining cost for projects under development and/or developed plus all capitalized costs incurred to date, including land acquisition costs, construction costs, capitalized real estate taxes and insurance, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP. Amounts for partially owned consolidated and unconsolidated properties are presented at 100% of the project.

Total Market Capitalization – The aggregate of the market value of the Company’s outstanding common shares, including restricted shares, the market value of the Company’s operating partnership units outstanding, including restricted units (based on the market value of the Company’s common shares) and the outstanding principal balance of debt. The Company believes this is a useful measure of a real estate operating company’s long-term liquidity and balance sheet strength, because it shows an approximate relationship between a company’s total debt and the current total market value of its assets based on the current price at which the Company’s common shares trade. However, because this measure of leverage changes with fluctuations in the Company’s share price, which occur regularly, this measure may change even when the Company’s earnings, interest and debt levels remain stable.

Traffic – Consists of an expression of interest in an apartment by completing an in-person tour, self-guided tour or virtual tour that may result in an application to lease.

Transaction Accretion (Dilution) – Represents the spread between the Acquisition Cap Rate and the Disposition Yield.

Turnover Total Residential move-outs (including inter-property and intra-property transfers) divided by total Residential apartment units.

Unencumbered NOI % – Represents NOI generated by consolidated real estate assets unencumbered by outstanding secured debt as a percentage of total NOI generated by all of the Company's consolidated real estate assets.

Weighted Average Coupons – Contractual interest rate for each debt instrument weighted by principal balances as of June 30, 2024. In case of debt for which fair value hedges are in place, the rate payable under the corresponding derivatives is used in lieu of the contractual interest rate.

Weighted Average Rates – Interest expense for each debt instrument for the six months ended June 30, 2024 weighted by its average principal balance for the same period. Interest expense includes amortization of premiums, discounts and other comprehensive income on debt and related derivative instruments. In case of debt for which derivatives are in place, the income or expense recognized under the corresponding derivatives is included in the total interest expense for the period.

Contacts

Marty McKenna

(312) 928-1901

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